The Dow Jones index fell 170 points at the close of Monday’s trading, as investors assessed geopolitical tensions and the US Federal Reserve’s plans to raise interest rates.
The S&P 500 was also down 0.3%, while the Nasdaq Composite closed unchanged after a choppy session.
The VIX index, known as a Wall Street fear gauge, rose close to its highs, hovering around 31, and was up 12.9% during mid-session.
“The outlook for global equity markets remains weak in our view, with markets under pressure not only from rising global bond yields and the prospect of higher interest rates, but also geopolitical tensions,” said David Sneddon, analyst at Credit Suisse.
As Robert Cantwell, chief investment officer at Upholdings, said: “The real fear is that China is backing Russia and the relationship between China and the US continues to deteriorate, that’s what’s really scary and will affect the economy.”
On Monday morning, St. Louis Fed President James Bullard told CNBC that the Fed needs to fight inflation more aggressively, echoing comments he made last week that weighed on the stock market.
“Our credibility is on the line here and we have to respond to the data, however I think we can do that in an orderly way that is not disruptive to the markets,” Bullard added.
On Monday, the United States of America closed its embassy in Kiev and moved it to western Ukraine, and the Ukrainian president said that he had been informed that Wednesday, February 16, would be the day of the attack.